This research seeks to identify those characteristics of acute care hospitals whch make them attractive prospects for institutional closure or "buy-out". It will examine possible financial incentives which might ease or speed such closures and will consider existing and possible mechanisms for funding such incentive structures. The study will develop and test a methodology for estimating the cost savings which might be derived by the system from a specific proposed closure. The proposed study will stress analysis of the financial statements of acute care hospitals in the identification of closure characteristics and the structuring of incentive packages. To estimate the benefit to the system accruing from a proposed closure, costs which would no longer be incurred by the system will be isolated. The average cost of providing services in the closing institution would then be compared with the incremental cost of providing transferred services in neighboring institutions. The cost of any incentives provided would be factored into the resulting estimate of system savings.